Simplify launches income-enhanced bitcoin futures ETF

Oct 3rd, 2022 | By | Category: Alternatives / Multi-Asset

New York-based Simplify Asset Management has introduced the world’s first ETF providing exposure to bitcoin futures while simultaneously delivering income through an options strategy overlay.

Paul Kim, co-Founder of Simplify Asset Management

Paul Kim, CEO and co-Founder of Simplify Asset Management.

The Simplify Bitcoin Strategy PLUS Income ETF (MAXI US) has been listed on Nasdaq with an expense ratio of 0.97%.

MAXI targets 100% exposure to bitcoin by investing in front-month bitcoin futures contracts trading on the Chicago Mercantile Exchange.

The fund’s options sleeve is actively managed and consists of opportunistically selling short-dated put or call spreads on highly liquid global equity indices.

Option spreads typically involve simultaneously selling and buying call or put options on a reference asset so as to generate income from the net option premium while capping potential losses if the price of the reference asset moves significantly against the short option position.

Simplify employs its proprietary option-writing algorithm to dynamically select option type, underlier, and strikes in an attempt to generate attractive risk-adjusted returns.

Commenting on the new listing, Paul Kim, CEO and co-Founder of Simplify Asset Management, said: “We’re very excited to be launching MAXI, providing investors for the first time with a capital efficient way to simultaneously gain exposure to bitcoin while potentially adding significant income to a portfolio.

“Whatever directional call an investor may want to make on bitcoin, MAXI can play a key role, as the fund’s income component can help add to returns on the upside while also acting as a downside hedge by virtue of the ‘padding’ such income may deliver during potential drawdowns for bitcoin.”

MAXI is the second bitcoin-related offering in Simplify’s ETF line-up, joining the Simplify US Equity PLUS GBTC ETF (SPBC US) which targets a 100% investment in US equities with a simultaneous 10% exposure to bitcoin via the Grayscale Bitcoin Trust (GBTC).

Tags: , , , ,

Leave a Comment